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The Berkshire Hathaway of the Internet (2017)

awilkinson.medium.com

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Re: The Berkshire Hathaway of the Internet (2017)

#41

Post by wbl »

tobyjsullivan wrote: post #39
sfobiab wrote: post #29

Andrew Wilkinson recently took a company public in Canada through a reverse takeover https://www.google.com/search?q=CVE:+WE Very early in the life of the company they have undertaken some pretty dishonest accounting of their revenues, net retention and other key metrics. The CFO resigned after the first reporting quarter. I have a strong feeling there is more to this character than just the recycling of virtue fille…

Just for my own edification, is the suggestion here that a reverse takeover is inherently dishonest? I'm asking out of genuine ignorance. I read up on reverse mergers a while ago and couldn't get a read one way or the other - felt kinda similar to a direct listing (which I understand even less). Anecdotally, the company that was considering doing it seemed suss af.

It's a way to avoid the scrutiny of most paths to take a company public. See also the billion dollar deli.

Re: The Berkshire Hathaway of the Internet (2017)

#42

Post by CharlieMunger »

nabla9 wrote: post #24
smg wrote: post #9

There is more to BH than how they acquire companies. They also have a track recored of out performing S&P for decades. I doubt if BH alpha is because of their streamlined acquisition process. Does Tiny have a similar record?

The whole idea that BH is a success due to good deals is wrong. BH has made good deals and bad deals, but that's not the main reason for their long term track record. BH has a good record because they have structured their business to have a permanent edge: Their insurance&reinsurance business (half of the business) generates cash and float constantly. The side of the company seeks ways to invest all that cash. Often…

You're getting the facts wrong. I'm sorry.

If you want to understand Berkshire Hathaway, join us on Reddit:

https://old.reddit.com/r/brkb/

You have a lot to learn, and you can start your learning journey TODAY!

Re: The Berkshire Hathaway of the Internet (2017)

#44

Post by [deleted] »

tobyjsullivan wrote: post #39
sfobiab wrote: post #29

Andrew Wilkinson recently took a company public in Canada through a reverse takeover https://www.google.com/search?q=CVE:+WE Very early in the life of the company they have undertaken some pretty dishonest accounting of their revenues, net retention and other key metrics. The CFO resigned after the first reporting quarter. I have a strong feeling there is more to this character than just the recycling of virtue fille…

Just for my own edification, is the suggestion here that a reverse takeover is inherently dishonest? I'm asking out of genuine ignorance. I read up on reverse mergers a while ago and couldn't get a read one way or the other - felt kinda similar to a direct listing (which I understand even less). Anecdotally, the company that was considering doing it seemed suss af.

[deleted]

Re: The Berkshire Hathaway of the Internet (2017)

#45

Post by nabla9 »

lotsofpulp wrote: post #27
nabla9 wrote: post #24

Earlier quoted context omitted.

The whole idea that BH is a success due to good deals is wrong. BH has made good deals and bad deals, but that's not the main reason for their long term track record. BH has a good record because they have structured their business to have a permanent edge: Their insurance&reinsurance business (half of the business) generates cash and float constantly. The side of the company seeks ways to invest all that cash. Often…

> The reason why BH has not been outperforming SP500 in the last 10 years is that cash is cheap for everyone (this is the longest boom in history) Once the water level drops again and we see who swims naked, BH will outperform again. At the start of the tech companies’ boom, Buffett famously said he does not invest in tech companies because he does not invest in what he does not understand. Then he bought a ton of Ap…

Berkshire stores value when times are good, they makes exceptional deals when there is crash and they can buy good stuff cheap. They always have cash and the don't have to sell assets to buy stuff.

Unless you think that there will be no financial crisis or severe recession again, Berkshire will probably shine again.

Re: The Berkshire Hathaway of the Internet (2017)

#46

Post by rrrrrrrrrrrryan »

ethbr0 wrote: post #34
texasbigdata wrote: post #22

Earlier quoted context omitted.

If it is naive the LPs signed off and agree with the strategy. If it’s not, it differentiates them from competitors. Until you’ve received a 35 page word document from a big public company with bullet point questions (their “standard” catch all set) it’s hard to describe the sheer pain of certain diligence; it can take a team of 6-8 people up to 2-3 weeks to turn something (depending how much you prepared by predicti…

The investing thesis can probably be boiled down to: most companies are run as they say they are (honestly), a few companies are unknowingly run poorly (inaptitude), and a very few are run fraudulently (wilfull deception). The due diligence process is designed to ensure the last one is ferreted out. If you believe you can find other signals to identify and avoid those companies, then why still conduct it (aka the mos…

> The due diligence process is designed to ensure the last one is ferreted out.

That's the stated purpose, yes, but the author implies the due diligence process is made to be intentionally painful and drawn-out to gain leverage over the acquisition target, and to dig up dirt in the company. At the end of the process, the new leverage and new dirt is used to try to aggressively re-negotiate the deal. Most companies don't cave to this, so most deals don't go through.

Presumably, this guy short circuits the process by just low-balling right off the bat then moving on if they don't accept, which saves both parties time and money.

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